There is discrepancy about those who are household workers and their responsibility with Social Security and Medicare taxes. For example, a house cook, a baby sitter, gardener or a cleaning person, should know some things about these taxes.
If you employ a household worker, this worker could be eligible for Social Security or Medicare later on in life. With this in mind, it is smart to deduct these taxes from his or her wages. You should then pay these taxes to the IRS, and eventually be reported to the Social Security Administration (SSA).
This employee will receive credit toward different benefits including Medicare. For example, this will give credit to the employee in the future if he or she becomes disabled. This also will provide benefits for dependentsWo of the taxpayer. Also, if the worker dies, his or her dependants will be eligible for benefits.
You might be asking yourself, “What wages must be reported?” Well I am glad you asked. The maximum amount a worker can receive without having to deduct Social Security or Medicare and report is $1.699.99. Therefore, any amount about above must have taxes deduced from the wages, and are reported once a year.
Also, those who employ such workers must include all money that you pay to the employees to cover the cost of meals, housing, or even transportation. Make sure you stay on top of this to avoid penalty fees.
You should contact the IRS for different reporting requirements. You can also find help there on and when to file these forms.
It is very important to keep records, such as their names, addresses and Social Security numbers of household workers. It is also vital to report accurate wages that they were paid.
In summary, household workers that receive anything equal to or above $1,700 a year must deduct Social Security and Medicare taxes. Doing so is the right and honest thing to do, and will benefit you later on when you need help yourself.
Tags: Household Workers, medicare, seniors
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